Why did I get a Margin Call notification when the market was closed?
The market opening process is not instantaneous – it is a gradual process that starts before 22:00 UTC.
As a result, AAAFx also start receiving rates before the 22:00 point, so they generate a Margin Call or Stop Out notifications before that – however trades are not closed before official market opening at 22:00.
If after the market opening, the available rates still put your account below the Stop Out level, then the Stop Out mechanism is triggered, and closure of the trades is initiated.
How can I protect my trades held over the weekend?
If you believe that over the weekend the market may be volatile and the rates will move against your open positions, you should anticipate risk.
If this trading strategy does not suit you, it is recommended that you get out of a trade by realizing your current profit or loss before the market closes.
How to calculate profit/loss on AAAFx trading platforms?
When the value of a currency that you have bought rises, then profit is created; you can secure the profit of this transaction by selling the currency back and thus closing the position.
Let’s see that with an example where we buy U.S. dollars and sell Swiss francs.
The rate you are quoted is 1.2755 / 1.2760. Because you are buying U.S. dollars you will be working on the “ask” price of 1.2760, or the rate at which traders are prepared to sell.
Let’s assume you buy 1 standard lot (100,000 units) at 1.2760.
A few hours later, the price moves to 1.2780 and you decide to close your trade.
The new quote for USD/CHF is 1.2780 / 1.2785. Since you’re closing your trade and you initially bought to enter the trade, you now sell in order to close the trade so you must take the “bid” price of 1.2780, or the rate at which traders are prepared to buy.
The difference between 1.2760 and 1.2780 is .0020 or 20 pips.
Using the pip calculation formula, we now have (.0001/1.2780) x 100,000 = $7.82 per pip x 20 pips = $156.49
Keep in mind that when you enter or exit a trade you are subject to the spread of the bid/offer quote.
When you buy a currency, you will use the offer or ask price and when you sell, you will use the bid price.